Charging an Electroscope by Induction
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Figures below shows the four stages necessary to charge an electroscope by induction.
- Bring a positively charged rod X near the cap C. The leaves diverge.

- Earth the electroscope by touching the cap C with a finger. The leaves collapse.

- Remove the finger, keeping the rod X in position. The leaves remain closed.

- Take away the rod X. The leaves now diverge. The leaves now have an induced charge.

Explanation
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When the rod X with positive charge on it is brought near C [figure (a)], the negative charges get attracted and they get concentrated on the cap C. On the other hand, the positive charge gets repelled and they get concentrated at the distant end on the leaves L and M. The leaves L and M diverge as they both have like negative charges. The negative charge on the cap C is 'bound' charge because of the presence of the positive charge on the rod X in the immediate vicinity. The positive charge on the leaves L and M is on the other hand 'free' charge.
When the cap C is touched, the free charges at L and M attract electrons from the earth. These electrons from earth neutralize the positive charge of L and M and the leaves close. The bound negative charge however remains at C.
When the finger is removed, the leaves remain closed. This is because of the presence of the positive charge on X which does not allow the negative charge on C to spread.
When X is taken away, the negative charge at C spreads over and some of it reaches both the leaves. Thus both the leaves L and M, now have similar negative charge and they repel each other. Hence the leaves diverge. Note that the induced charge at the near end is always opposite to the inducing charge.